Houston's Outlook in Real Estate
by: Laurie Johnson, January 7, 2009 9:01:09 pm
"Houston is not immune to everything that is happening across the country and globally. But we do feel that we have an advantage in that we have a very stable economy based on energy and other factors."
Richard Rudd is the Managing Director for the Houston office of Jones Lang LaSalle, a commercial real estate services firm.
"And we think we're going to have a much more stable outlook from a real estate standpoint and an economic standpoint over the next 12 months than most places around the country."
It's long been known that Houston's economy often runs counter cyclical to the rest of the nation.
But Rudd says investors here can expect worsening markets in 2009.
"It's an uncertain time. The thing about owning an office building or other real estate in Houston is that it's still a very valuable commodity. And there's embedded value, even in today's lower rental rates in Houston real estate compared to other places. So our advice would be if you don't have to sell into the teeth of a down market, don't do that."
"Whether it's the consumer, the CEO, across all areas we have got to see some confidence. This is a confidence issue. Confidence will be a correction."
That's Mary Carolan, also with Jones Lang LaSalle.She says there's plenty of money waiting to be invested in Houston's economy.
"The next cycle, I do believe, will bear the conservatism of fiscal reason. I think we had this let's spend the money, why, because it's there. I think today we're going to say is there a good reason to spend the money and hopefully we can find it."
Both analysts predict a lot of equity being invested in the real estate market in the next two years.
"Houston is a very cheap city. We have a very stable workforce, very highly-educated, very bi-lingual. The cost of doing business, the cost of living is extremely cheap. We have excellent volume of office space and a great place to live. So, I think Houston is a very positive place for companies to do business."
And they say while it may get a little worse, it will get better.
Laurie Johnson. KUHF-Houston Public Radio News.